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Brooks denies allegations, responds to civil suit

By MIKE GELLATLY

Apr 17 2013 12:01 am

Brooks

Jonathan “Jay” Brooks says he is hitting back at those whom he feels have wronged him and his wife Tracy – chief among those, the Attorney General’s office and “those who are printing allegations as though they were fact,” according to an email Brooks sent Tuesday.

“I have tried to stay positive and allow the system to work. That time has come to an end,” Jay Brooks wrote in the email he sent Tuesday to friends and clients, much as he did the day after the first allegations were made public.

Brooks titled his email “Time to Attack” and talked of hiring a “vicious bulldog of an attorney” to go after those he is unhappy with.

He attacked “the AG Office” for prosecuting him with a “‘Guilty until proven Innocent’ approach,” it read.

In the email, Jay Brooks also argued against the belief of Columbia attorney Pete Strom that his alleged investment fraud was a Ponzi scheme.

“If I were running a Ponzi scheme, would not more people have been involved?” Brooks wrote. “A Ponzi scheme requires constantly attracting new people to pay off the old ones. The school was to pay off these individuals through a lease on the building, not investors.”

The amended complaint filed by the State Securities Division on Monday states that he lied about the number of investors, and that he did use new investors to pay off the old ones.

“Jay Brooks lied, among other things, about the number of his and (his company’s) clients with funds invested in (Brooks Real Estate Holdings) and Compass,” the document filed by the Securities Division reads. It also states that he used “Investor C” funds to make “payments to one or more other investors.”

In the brief email, Brooks admits to taking trips to “Charlotte and Hilton Head.” The amended complaint states that the Brookses illegally spent investor money with “Marriott and American Airlines,” though the location of the hotel or flight destination is not specified.

Jay Brooks is also facing a civil suit filed by the Caniglia Management Group.

The Group, along with Thomas and Joshua Caniglia, allege in a civil suit filed in Aiken that the Brookses were in breach of contract with them. According to the suit, they were hired by Jay and Tracy Brooks to assist with selecting property for Compass Academy, contract with an architect and aid in the acquiring the correct zoning permits to build and interact with utilities and to act as a liaison between “contractors, builders and architects and city, county and state officials.”

The group’s lawsuit alleges they were to be paid a fee equal to 5 percent of the project’s total cost, or $350,000 in contractually set increments. But, the suit alleges, they had only received $17,000 in June, when they were told their “services were no longer needed because the Texas investors had refused to permit any further payments.”

The Brookses, through attorney Clarke McCants III, of Aiken, have denied The Group’s claims and have launched their own counterclaim.

McCants’ response claims the Caniglias were negligent in their operations and failed to complete many aspects of their assigned role.

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